HC Deb 28 April 1983 vol 41 cc983-4
7. Mr. Lennox-Boyd

asked the Chancellor of the Exchequer whether he will revise upwards his estimates for growth in the economy in the current year.

Mr. Brittan

The forecast published with my right hon. and learned Friend's Budget predicted growth of 2.5 per cent. in GDP between the second half of 1982 and the second half of this year.

Indicators for world output, industrial output, retail sales and business confidence since the Budget all provide encouraging confirmation that the economy is recovering. But these developments have not led us to revise upwards our projections for growth in the coming year.

Mr. Lennox-Boyd

Does my right hon. and learned Friend agree that the evidence of the recent survey by the Confederation of British Industry and other favourable signs are the reasons for the Opposition's desperate anxiety to have a June election, for fear that the position will be worse for them in the autumn?

Mr. Brittan

The anxiety is well placed, because the CBI's latest industrial trend survey shows encouraging improvements in business optimism. It is at the highest levels since 1976. That fact is reflected not only in the measure of optimism but in improved order books. Numerous other signs in the real world show that to be so. Just a few of the more benighted Opposition Members do not accept what is happening.

Mr. Richard Wainwright

Will the Chief Secretary inform the House of the Government's message to those British manufacturers whose plans to contribute to greater growth in the economy depend on a realistic international value of the pound sterling?

Mr. Brittan

The Government's job is not to give messages of the kind that the hon. Gentleman has in mind, but to provide the right financial framework and the right balance of measures to encourage industry. The contents of the Budget were the best possible encouragement to industry, and especially to small businesses.

Mr. Shore

I am sure the House will consider that the right hon. and learned Gentleman's reply was well-judged in his refusal to increase his estimate for the growth of GDP, of 2 per cent. this year and 2.5 per cent. in the second half of this year, over the second half of 1984. I assume that the right hon. and learned Gentleman has read the recent quarterly report of the CBI, which states that 72 per cent. of British firms are operating below capacity and only 4 per cent. consider that they are short of orders. In the light of that survey, why is there so much apparent optimism in the economy and in Government statements? What is the basis for that optimism?

Mr. Brittan

The right hon. Gentleman's question is as good an example of scraping the barrel as we shall hear. He does not seem to challenge the fact that the economy is growing, but he welcomes the fact that the Government have not announced a faster rate of growth than they announced at the time of the Budget. As to the optimism, it is not difficult to understand why British industry should regard increasing order books and expectations as a good sign, as does the whole country. The only person who regards such optimism as a bad sign is the right hon. Gentleman.

Mr. Forman

Since growth in the economy in this and future years depends to a considerable extent on satisfactory non-inflationary growth in our partner countries, notably the Federal Republic of Germany and the United States, may I ask what proposals my right hon. and learned Friend the Chancellor of the Exchequer will be putting forward at Williamsburg to make that more likely?

Mr. Brittan

At Williamsburg my right hon. and learned Friend will be engaged in discussions designed to ensure that, wherever possible, the countries of the Western world adopt policies relating to inflation and budget deficits, thereby enabling the progress that is apparent in Britain, the United States and Germany to continue, not to be aborted.